Membership subscription businesses are a Utopian business model where your revenue grows every month, we all get fat bonuses, and everyone lives happily ever after. Of course, this is crap, but that’s what some appear to promise and many believe. I had a long conversation with a company analyst and business newspaper reporter about a number of subscription businesses and their churn rates. I was able to forecast revenue and demonstrate that the company’s revenue targets are overstated unless the company doubles new customer acquisition rates or cuts their churn rate by 75 percent. Neither of those is likely. (P.S. I have a hot tip if you like to trade options or ever short sell a stock.) The problem is in the approach. What are memberships and subscriptions for? Is the goal of creating them to get rich? If that’s your approach, then the membership model isn’t going to work … Continued
How 24-Hour News, Social Media, and Our Culture Cause Retention Deficit Disorder, and How You Can Become Part of the Cure
No amount of acceleration will get you to your destination when you are headed in the wrong direction. And, you can’t change direction until you recognize you are following the wrong path. There are three important ways we create Retention Deficit Disorder within our membership and subscription programs. But it’s not your fault; our culture is leading us astray, creating anxiety, confusion, and frustration both within us as well as the people we are trying to attract to our membership. Here’s how you can take control, break through membership growth plateaus, and grow your recurring revenue. Trade Information for Wisdom I’m a recovering news junkie. I followed every story, always had an opinion, and happily debated the big stories of the day. Even as I write this, I feel the urge to check out what’s happening right now and what everyone has to say about it. I’ve been programmed to … Continued
The $651,958.00 Email Series
Can you imagine a series of emails generating $651,958.00? It’s hard to believe, isn’t it? This is the power of retention. And if it’ll work this well with this example, it’ll work for you too. Bradford Tax Institute delivers tax-saving strategies to members of the Tax Reduction Letter. How much do you enjoy working on your taxes? Exactly! This is a tough sell because most people 1) hate thinking about their taxes and 2) are paying someone else to take care of this so they never have to worry about it. Why would anyone ever subscribe to the Tax Reduction Letter? Murray Bradford’s information is different from anything else out there. All other tax-information services explain the law and how to comply with it. Murray Bradford delivers strategies for using the law to pay less in taxes. Murray’s strategies are so unique that few professional tax preparers know about them. … Continued
Lessons Learned from an Email Series that Generated $651,958.00
I’m coming to you this month from seat 6E in the first-class cabin of flight AA1229 from San Diego to Dallas where I’ll catch a flight home to Tallahassee. I’ve been traveling a lot this summer. There’s a lot of Retention Deficit Disorder out there, and I’m the guy subscription membership programs call to treat it.. We’ve had a tumultuous October with Hurricane Michael. Overall we were extremely lucky. We did spend several days without electricity or internet. Lots of trees fell in Tallahassee, luckily none of them hit my house or cars. The days without electricity gave us an opportunity to clean up. This month, I have some personal travel. First, my wife and I are flying to Raleigh, North Carolina, for the FSU Seminoles versus NC State Wolfpack football game. My wife, Kory, graduated from NC State, so we’ll be catching up with a lot of her college … Continued
Connect Your Members to Dramatically Increase your Retention Rates
Every Tuesday morning, my wife and I participate in an interval training group at the running track. The group is led by a Hall of Fame track coach who will help you become a faster runner by running fast-paced intervals once or twice a week. But my wife goes to chitchat with her friends in the group. I started going to track intervals sessions weeks before Kory did. I enjoyed the workouts; it’s fun to train hard. And as my times improved, Kory wanted to increase her speed as well, so she started attending each week with me. Each week, our coach chooses a different workout to keep it interesting, and he keeps us on task to minimize loafing. It’s a good value that solves a problem: I wouldn’t do this type of workout on my own, but I can get to the track, and he’ll lead me through it … Continued
There’s a Lot More to Retention Than Value, and That’s Good News for You
It’s expensive to deliver value. Solutions to your members’ problems are expensive to conceive, test, and produce on a regular basis. It should be good news that members are looking for a mix of benefits and aren’t focused solely on value. Members want to be part of something bigger than themselves. Memberships that are about having a greater impact have higher retention than those that rely on value alone. Your mission is an essential part of your Retention Deficit Disorder treatment. What do you want to accomplish by creating your membership? What is your movement about? How do you want the world to be different? These are important messages to include in your marketing. This is often where villains crop up. There’s little value in creating villains for the sake of villains. Instead, how will your membership vanquish the villains? Let your member experience the satisfaction of feeling like … Continued
Lots and Lots of Value May Retain Members, But It’s Not a Business Plan
It didn’t take long for the Movie Pass bubble to bust. It offered unlimited movies for $9.95 a month. Movie Pass paid theaters full-price admissions for the tickets, and Movie Pass members took full advantage. Now Movie Pass is out of cash and dying. They attracted the wrong crowd of members. They attracted takers — those who love taking advantage and who had nothing better to do than spend a Thursday in the theater watching every movie at the multiplex, then come back on Friday and watch them again with friends. At $9.95 a month for unlimited movies, there was no reason to spend the summer anywhere other than the theater. For a while, it looked like the Move Pass strategy was working. Movie Pass subscription numbers exploded past 2 million members. Movie Pass was compared to Spotify and Netflix. And retention was great. Until the company ran out of … Continued
Retention Deficit Disorder and How to Cure It
Does your membership attract as many new members as it should? Do you retain at least 70% of your new members for more than six months? Are your membership numbers growing to meet your goals? You are suffering from Retention Deficit Disorder. I’ll explain the treatment in detail, but first let me tell you how I came to discover this disease and the treatment. In 2000, I earned Chairman’s Preferred Status on U.S. Airways. I flew more than 100 flight segments that year. At the time, my daughter, Samantha, was 5 years old and my son, Robert William, was 1. I was out of town as much as I was home. I knew I had to do make a change. I resolved to travel less. And in 2002, I earned no status with an airline. When I got that letter telling me I was no longer preferred … wow. I … Continued
Changing Your Member’s Mental Picture of Your Membership
Wow, that cartoon. What happens from the first image to the second? Does the guy get killed? Can you see the ax swing in your mind’s eye? Where does the ax hit? In this illustration, you did the killing, not the cartoonist. In your mind, you moved the ax. And, everyone I’ve shown this to has told me a different place the ax hit. While I see the ax come down in the victim’s back, some told me he chopped his head off, while others told me the ax came down in the head somewhere. This same phenomenon happens with all communication. This illustration comes from the classic book, Understanding Comics, by Scott McCloud. Scott gives you a history of comics and an explanation of the art, but more importantly, he’s explaining how communication works. Buy a copy, Scott wrote it using cartoons throughout. It’s brilliant. You may use words … Continued
Are You Disappointing Your Members?
What you sell damn sure better live up to your sales promises. There’s no retention without fulfillment. I had a great discussion with a client today. We are creating a new onboarding product that will become a “gift with purchase” that we can offer to increase sales conversions. He asked me, “If this video is longer than a few minutes, will someone watch it?” My answer was, “I don’t care if the video is three minutes, 30 minutes, or three hours long, the priority is that it delivers everything promised during the sales process in a satisfying way.” Above all, deliver what you promised. I have an assessment on my desk now — a client asked me to review their business because they have a 33 percent refund rate on purchases. While it’s amazing and wonderful they are able to sustain a 33 percent refund rate and still grow their … Continued